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Rising Wages: Has China Lost Its Global Labor Advantage?

Author

Listed:
  • Dennis Tao Yang

    (Chinese University of Hong Kong/ The Conference Board)

  • Vivian Chen

    (The Conference Board)

  • Ryan Monarch

    (University of Michigan)

Abstract

We document dramatic rising wages in China for the period 1978–2007 based on multiple sources of aggregate statistics. Although real wages increased seven-fold during the period, growth was uneven across ownership types, industries and regions. In the last decade, the wages of state-owned enterprises increased rapidly and wage disparities between skill-intensive and labour-intensive industries widened. Comparisons of international data show that China’s manufacturing wage has already converged to that of Asian emerging markets, but China still enjoys enormous labour cost advantages over its neighbouring developed economies. Our analysis suggests that China’s wage growth will stabilize to a moderate pace in the near future.

Suggested Citation

  • Dennis Tao Yang & Vivian Chen & Ryan Monarch, 2009. "Rising Wages: Has China Lost Its Global Labor Advantage?," Economics Program Working Papers 09-03, The Conference Board, Economics Program.
    • Handle: RePEc:cnf:wpaper:0903
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    File URL: http://www.conference-board.org/economics/workingpapers.cfm?pdf=E-0043-09-WP
    File Function: First version, 2009
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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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